From NOT A LOT OF PEOPLE KNOW THAT
By Paul Homewood
h/t Doug Brodie
This may be the first crisis Starmer faces, as the real world comes up against Miliband’s fantasy world:
The car giant behind Vauxhall has threatened to mothball its UK factories amid a row over net zero targets for electric vehicle (EV) sales.
Stellantis warned on Tuesday that it would be forced to close plants at Ellesmere Port and Luton, where it makes vans, unless the Government relaxed rules forcing manufacturers to sell a certain proportion of EVs.
It has also threatened to reduce the number of petrol and diesel cars it sells in the UK.
The warning dramatically escalates a dispute with the Government over the so-called zero emission vehicle (ZEV) mandate, which requires car makers to sell rising proportions of electric cars annually.
From this year, at least 22pc of cars they sell must be electric and the figure rises gradually to 80pc by 2030. In 2035 the sale of new petrol and diesel cars will then be banned.
However, Maria Grazia Davino, UK managing director for Stellantis, said the rules were out of step with consumer demand and risked making sales unprofitable.
Stellantis makes electric cars and vans at its Ellesmere Port plant and vans in Luton, employing more than 1,000 workers across both sites.
Speaking at a car industry conference in London, Ms Davino told journalists the mandate would have a big impact and “damage the UK”.
‘Hostile market’
Speaking at a car industry conference, she told journalists the mandate would have a big impact and “damages the UK”.
Ms Davino added: “We have undertaken big investments in Ellesmere Port and in Luton, with more to come.
“But if this market becomes hostile to us, we will enter an evaluation for producing elsewhere.”
Asked how long Stellantis would wait for a decision from the Government, she said: “Less than a year.”
https://www.telegraph.co.uk/business/2024/06/25/vauxhall-stellantis-threatens-stop-making-electric-vans-uk
This was inevitable, and certainly won’t be limited to Vauxhall. As I have repeatedly pointed out, the UK motor industry as a whole cannot afford to pay the hundreds of millions in fines coming their way at the end of the year. The only option open to them is to cut back on production of ICE cars, in order to get back to the 22% target.
Based on current trends, this could mean that factories shut down production for the last three months of the year, or alternatively simply stockpile 3 months of production.
This is not sustainable in the long run, and the likes of Vauxhall would quickly run out of cash to do so. And it would make the problem doubly worse next year – not only would they face even tougher targets next year, but they would start the year with 3 months of ICE cars to sell, impacting output next year.
This is why Ms Davino has stressed the government has a year to sort the problem. They have clearly been hanging on to see what government will do to address the problem after the election. But unless the punitive ZEV mandate is relaxed, expect Stellantis to shut up shop next year, and shift production to Europe instead.
And they won’t be the only ones.
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